EUR Gains Vs. USD, Other Currencies

The EUR/USD pair is currently on a bullish trend reaching almost the 1.320 level. This was despite recent data showing positive housing data and corporate earnings in the United States, the growing pessimism in Germany, and the IMF's statement of a 50% chance of a recession at the EU.

Just last week, the pair was struggling to break through the 1.3020 mark, making the current appetite for risk somewhat surprising.

Aside from the USD, the EUR also gained against several majors. The EUR/JPY pair, for example, rose to 127.69 during Tuesday's trading. Meanwhile, the EUR/GBP made a 20-pip jump from a low of 0.8522 to 0.8544 on Tuesday.

The US Census Bureau announced yesterday that its housing starts figure rose from the previous 0.939M to 1.036M, contrary to the earlier consensus of a drop to 0.930M. The housing starts is an indicator of the number of single-family homes or buildings were constructed during a specific period.

Meanwhile, Germany reported that the country's economic sentiment for April dipped by more than 10 points, from 48.5 in March to an overly pessimistic 36.3. Earlier consensus was that it would only drop to 42.0.

In the US, the IMF announced a cut in its global growth forecast from 3.5% in January to just 3.3%. It also urged policy makers at the EU to be more aggressive with their monetary policy. According to the IMF, the Eurozone is expected to contract by 0.3%. IMF Chief Economist Olivier Blanchard said that, "Europe should do everything it can to strengthen private demand. What this means is aggressive monetary policy and what this means is getting the financial system to be stronger -- it’s still not in great shape."

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